Choice "C" is correct. Hart's basis for the land is $6,000.Rule: The basis of property received in a distribution, other than in liquidation of a partner's interest, will ordinarily be the same as the basis in the hands of the partnership immediately prior to distribution. However, in no case may the basis of property in the hands of the partner exceed the basis of his partnership interest reduced by the amount of money distributed to him in the same transaction.
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|---|
| Partnership interest adjusted prior to distribution | $ 30,000 |
| Amount of cash distributed | (24,000) |
| Remaining basis after cash distribution | 6,000 |
| Distribution of land with basis of $9,000 | (6,000) |
| Remaining partnership interest | $ 0 |
The partnership interest may not be reduced below zero. Therefore, the land has a basis of $6,000 in the hands of the partner.
